Welcome to episode 227 of the Nerd Journey Podcast [@NerdJourney]! We’re John White (@vJourneyman) and Nick Korte (@NetworkNerd_) – two technology professionals with backgrounds in IT Operations and Sales Engineering on a mission to help others accelerate career progression and increase job satisfaction by bringing listeners the advice we wish we’d been given earlier in our careers. In today’s episode we share part 1 of a discussion with Scott Egbert, detailing his career shift from engineering to finance, the difference between accounting and finance, the role of business school, a career progression goal of being a business unit CFO, and how we can better communicate with finance.

Original Recording Date: 03-13-2023

Topics – Meet Scott Egbert, An Interest in Finance, Changing Everything at Once, Balance Your Ambition, An Executive Goal, Think Like an Owner, Career as a Profit and Loss Statement, Understanding and Communicating with Finance

• Mentioned in the intro
  • A special thanks to Leanne Elliott of the Truth, Lies, and Workplace Culture Podcast for connecting us with Scott. The podcast is hosted by a business psychologist and a business owner, and they have excellent guests and discussions. We highly recommend checking out their show!

4:21 – Meet Scott Egbert

• Scott Egbert is a leadership coach focusing on career development and transition. Scott helps people who are dissatisfied with their career find joy, and there are a number of examples of this we can discuss.
• According to LinkedIn, Scott began years ago by studying aerospace engineering.
• When Scott was in high school he wanted to be a fighter pilot, but he had glasses. At the time you needed 20/20 vision to be a fighter pilot.
  • Scott tells us today he gets a little motion sick riding the teacups at Disneyland and feels like being a pilot would have never worked out.
  • There was really no backup plan, so Scott needed help from a high school guidance counselor. Because he was good at math and science the counselor encouraged him to pursue engineering. Scott never questioned this suggestion.
  • With an interest in aviation and an interest in space from a young age Scott thought aerospace engineering was the way to go. Though he would not be able to be a pilot, this would allow Scott to participate in this field in some other way.

6:13 – An Interest in Finance

• After studying aerospace engineering and being an engineer for about 4 years, Scott eventually chose to get a MBA.
• Scott tells us he tends to get bored easily and after some experience as an engineer, he found the scope was very narrow. After speaking with peers at other companies who confirmed the narrow scope, he found some of his peers really loved that aspect. Scott, on the other hand, was looking for more variety in his work.
• Scott was working for an electric utility company, and they were looking to acquire a few power plants. As an engineer Scott was pulled into the process to look at the specs of some of the plants.
• Scott found this process of acquiring other companies quite fascinating, and he started asking a number of questions. Others who could tell he was very interested in these types of scenarios encouraged him to go to business school so he could work on these types of things more frequently.
  • Scott went to business school over a 4-year period to get a MBA while he was working full time. He tells us he isn’t sure he would recommend this approach because you essentially have no life for 4 years.
  • Scott was married but didn’t have kids yet during this time.
  • When John was in school in the 90s they wouldn’t let you major in aerospace engineering because there were no jobs.
  • After graduating in 1993 in aerospace engineering during a recession, Scott worked as a mechanical engineer.
• Scott tells us he remained an engineer for a total of about 8 years.
  • He became more interested in the why behind what the company was doing and how the decisions being made were strategic.
  • It was the mergers and acquisitions project he worked as an engineer that originally peaked Scott’s interest.
  • While Scott was an engineer, he had a manager who knew he was interested in Finance. This manager was willing to have Scott work on projects where he could test out what some of the Finance work might look like.
  • Did Scott know in advance the type of role he could potentially get after obtaining the MBA?
    • If Scott could go back and give his younger self advice, shadowing people who are doing the job he thought he wanted or at least having conversations with people who held the jobs that interested him would be high on the list.
    • Scott went through a 4-year bachelor’s degree in engineering but never did an internship or spent time having a conversation with engineers. He feels these steps were pretty big leaps of faith looking back.
    • Nick argues we’re not taught to do this in school. We see things / roles that look cool and decide that is what we want to do. Likely we do not go through the due diligence of interviewing a parent or someone else about what they do to make up our mind as to whether it sounds interesting.
    • Scott says in traditional business schools there are usually internships between years 1 and 2 as well as experiential projects integrated with companies but not so much in the evening program he chose. In this case, Scott had a manager who was cooperative and looking to give Scott on the job experience.
  • Nick’s hope is that everyone works for a manager who cares about what you want from a career long term and provides some practical experience for you (if that’s possible).
    • Scott feels his manager definitely took a risk on a couple of levels. Those managers with a scarcity mindset would not be willing to let their employees go and do something else. Scott’s manager was willing to let him go and do something else.
    • It’s also risky to let employees work on projects outside of their domain (which Scott’s manager also did). This can put your manager’s reputation on the line. Scott appreciates that manager and understands not every manager would have done this.

13:00 – Changing Everything at Once

• Coming out of getting the MBA Scott ended up changing almost everything at once (which he wouldn’t necessarily recommend others do).
  • Scott went from engineering to finance and from electric utility (regulated industry) to high tech (a semiconductor company, highly competitive).
  • And at the same time Scott moved from Michigan to Oregon where he resides now.
• What is the difference between accounting and finance?
  • At a smaller company these terms may be used interchangeably despite them not being the same thing.
  • Accounting can be thought of as the recording and reporting of financial transactions – a cash flow statement, a balance sheet, a profit and loss statement, the 10-Q, and the [10-K].
    • These are all reports that show how a company is performing to investors (sort of like keeping score). The accounting function is responsible for generating these reports.
  • Finance is more the planning and directing of those transactions.
    • Scott encourages us to think about our personal finances. A budget determining how much to spend in a specific area would be more of a finance function. Balancing a checkbook would be more of an accounting function.
  • Whether it is a small or a large company, you must have the accounting piece to serve investors.
    • Nick suggests that transactions are things like invoices a company has issued to its customers, payments that have been issued by customers against those invoices, and whether payments were received within agreed upon terms from the purchase order. These are often called accounts payable and accounts receivable.
  • The financial analysis behind strategic decisions would be finance.
  • John mentions the recent (as of this recording) Silicon Valley Bank failure and asked about the function of treasury.
    • Scott thinks of this as a function of accounting (perhaps a little different than described). Treasury simplified is more about what we do with our cash and how we ensure we have the cash we need.
  • Scott was more interested in finance and the strategies behind some of the corporate acquisitions.
  • The MBA program Scott completed in Michigan had certain core requirements with the rest being a pool of electives. Scott did the majority of his electives in finance.
  • Scott considered himself more as a qualitative person and thought the core marketing and organizational development classes were a bit fluffy and focused on soft skills.
    • "The org development stuff…that’s the most important stuff there is because that’s where companies go off the rails." – Scott Egbert, reflecting back on the perception of having to take an organizational development course
  • When John thinks about people getting into in finance, it is usually investment finance. We learn that there is investment finance as well as corporate finance and that there are a number of focuses possible within the finance space.
    • Scott looked at investment banking as a first potential career fit within the finance space. It pays well, and the hours are crazy. Since Scott and his wife were married at the time but had planned to have children, they agreed investment banking was not the lifestyle to sign up for despite the pay.
    • Scott then shifted his focus to corporate finance. Though it did not pay quite as well as investment banking it would be more manageable in terms of workload. Investment banking would have required a lot of late nights and weekends.
    • John says he likes watching movies about people who went into investment finance, but that does not mean he wants to do it.

20:36 – Balance Your Ambition

• Scott tells us this often comes down to a person’s values and priorities. If your goal coming out of school is to make as much money as possible as quickly as possible investment banking is a great option.
• For Scott, there was a progression of learning over the years. He had decided he did not want to sell his soul to his employer. Scott wanted to have a life outside work. As Scott learned, over time this is much more nuanced than we might think, and our priorities change.
  • When Scott came out of business school (and still had no kids), despite not wanting to work all the time he was achievement oriented. Promotions were important to him.
  • When kids came along, suddenly balance was no longer hypothetical and was more important than it was coming out of business school.
  • Another driving factor for Scott was security (job and financial security that is). He had 4 different offers coming out of business school and was not extremely worried if something fell through in his first choice.
  • Now that we’re seeing layoffs from many companies, security is a lot more important than it once was. Scott is hearing this from many of his clients.
  • John says this is a powerful lesson to learn – figuring out your individual requirements and the things you value in your career. Be willing to ask these questions over time because inevitably it will change based on time of life or phase of year even. There are any number of things that could change what you think you would want.
• Was Scott’s first finance job what he wanted it to be / what he thought it would be?
  • Scott says no. It was ok because it was first finance job, and he was still learning (which made it ok).
  • This first job at the time felt more like he was a bean counter (accounting focuses) and less strategic than Scott wanted.
  • When Scott was an engineer, there was a prescriptive job description from which he didn’t deviate too much. In finance on the other hand, Scott was given a base job description and found he would be looked upon to initiate the strategic opportunities.
    • This required some ramp time for Scott on business acumen to truly get a feel for what was going on.
    • John emphasize that you have to learn the business and your core job responsibilities first. Otherwise you don’t know where to step outside and look for strategic opportunities. Even having an internship before this likely would not give enough insight to hit the ground running.
  • Scott was a bit frustrated in that first assignment, But he realized later this is going to be the case in any first assignment when you’re changing industries and functions.
    • As Scott began to mentor people later in his career, he saw many of the same things he had seen in himself. People may be ready to go and take over the world, but they don’t realize it doesn’t happen right away.
  • John noticed an ego from folks in college in thinking they would graduate and then go and lead something / be able to build and execute strategy at a business without really understanding anything about that business. Does the same thing happen for MBA programs?
    • Scott tells us people who are admitted to top tier business schools have accomplished a lot already, and he thinks ego is a factor.
    • "They’ve accomplished a lot. They are spending a fortune going to business school because they have very high expectations of doing even more than what they’ve already done." – Scott Egbert, sharing a perspective on MBA program members
    • John mentions it is likely that everyone else hired for an entry level finance position was also a MBA program graduate. The positions are entry level because the people don’t know enough about the company and how it works or what their day to day job functions are going to be.
    • "As of day 1 on the job, nobody cares where you got your degree….It’s a really important credential to get your food in the door, but once you’re in, it’s not something people look to and care about." – Scott Egbert

28:13 – An Executive Goal

• Scott didn’t have a clear idea of what the career trajectory of somoene in finance could be going into it. This goes back to the advice of talking to people who do the job you think you want.
  • If you’re doing an internship you have the chance to ask these kinds of questions and receive mentoring from others you work with.
  • Scott didn’t do an internship. He knew he would be starting off as a financial analyst, progressively become more senior, and then those analysts eventually become managers.
  • At this point in time Scott didn’t have a clear picture of what leadership really meant. It was just something he thought you eventually do, much like Anudeep Parhar shared with us in Episode 208.
  • When he was taking all the elective classes in finance, he was very good at building financial models and forecasting. At that point, this was what Scott believed really good finance looked like. When it comes to being in leadership in finance, there are so many other things more important than being savvy in Microsoft Excel.
• How did Scott know it was time / he was ready to move into financial leadership?
  • At some point after business school Scott had set a goal of becoming a business unit CFO (Chief Financial Officer).
  • Early on he sat down with mentors and tried to work backward from this goal. Scott created a checklist of experience he would need and skills he would need for that type of role. This helped him determine what the next role would need to be and what the logical progression was. One of the skills / experiences he needed was people management.
  • A business unit would have its own profit and loss (or P&L) statement for a product or portfolio of products.
  • John hypothesizes the CFO of a business unit would be more like an executive level role than a front line manager or middle manager role, possibly even managing a team of executives. Is people management at this level core to the CFO’s job function or incidental to it?
    • Scott tells there is a distinction he did not appreciate early on between management and leadership.
    • Being a front line manager is the beginning of getting results through other people and not just through your own work.
    • When you’re in leadership and managing managers or managers of managers, there is an entirely different level of coordination and setting a tone for the organization (i.e. the type of things you learn in organizational development classes in a MBA program). Scott calls people management part of a CFO role "table stakes."
    • John says you’re managing the people but also overseeing strategic objectives for each of the teams that the people you manage are responsible for while also setting a leadership tone for the entire organization (in attitude, ethics, modeling of work / life balance, etc.).
    • Setting an organizational tone can often get overlooked. Scott tells us this comes through in what leaders say and talk about in staff meetings as well as the example they set.
  • Sometimes we find ourselves working inside an organizations where a leader may promote work / life balance, for example, but is still sending out e-mails late at night, on weekends, and in early morning.
    • Many employees have e-mail on their phone that is available 24/7 wherever they are. If you get something from your boss on the weekend it could make you wonder if you should answer it and could set a bad precedent with employees in general. Maybe scheduling a message to arrive early on a Monday morning is better than sending it on a weekend.
    • Nick says the other side of this is for employees not to check e-mail on weekends / during times they are not working.
    • Each of these examples points to boundaries, an area where Scott feels he’s struggled in his career.
  • How did the struggle with boundaries go / change as Scott progressed along what we’re calling his CFO reverse timeline?
    • With each step toward the CFO goal, there was more scope and responsibility that comes along with it.
    • If you’re not setting good boundaries, like Scott was, you might be working late at night or the occasional weekend. Scott tells us that from childhood he has been a people pleaser and has struggled to say no.
    • Nick says he’s always struggled to say no as well.

36:51 – Think Like an Owner

• Can organizational effectiveness and organizational leadership be learned independent of a MBA?
  • Scott tells us there are classes in these subject areas as well as executive MBA programs one could leverage for continued education.
  • Scott remembers the professor of his organizational development class as part of the MBA program stating most quantitative people were not excited to be in the class but that the class was the most popular one when people came back as part of the executive MBA program.
    • "It’s underweighted early on, and that’s where leaders realize they need the most help." – Scott Egbert, on the importance of learning organizational development
  • John says organizational development is the topic he’s not really heard about until this discussion. The words organization and development are terms we can easily define, but when you place them together it doesn’t seem so easy to come up with a definition.
  • Scott tells us when he was an engineer, all the other engineers worked in the same building. The collaboration was very direct.
  • Moving to Intel (a much larger company with sites all over the world) was his introduction to virtual teams.
  • It’s a very interesting dynamic when everyone but one person works at the same location. This creates an entirely different team dynamic. Scott didn’t realize how big of a disadvantage the one person offsite was at.
  • Then you have the global pandemic where the majority of people are working from home for a season of time and may still be working in some kind of hybrid scenario. This creates an entirely new dynamic for collaboration and in which work gets completed. It’s easy to overlook this until something gets disrupted in a big way.
    • To Nick, this sounds like something those considering people management need to keep in mind or be extra mindful of if leading a team that has one or multiple members working in different locations.
• What about some other qualities needed for someone to an effective leader in the high tech finance industry?
  • Andy Bryant was the CFO of Intel when Scott started working there, and Andy used to say "think like an owner."
  • If Scott was a product line analyst for a specific product, Scott needed to have the mindset of the CFO of that product, taking on a level of responsibility and ownership as if he really did own it.
  • Scott says in cases like this the way he would do the analysis and modeling would stay the same, but he might think of the stakeholders differently (i.e. thinking like he is in charge of it).
  • In the high tech finance industry just knowing the numbers isn’t enough. You need to understand the business drivers and the competition (i.e. have business acumen internally and externally).
  • There is a big communication piece to good leadership. When Scott began as a financial analyst it was about getting the numbers right. If Scott is presenting something to executives, it is about telling a story. He isn’t just showing data on the page but rather showing insights that answer the question of why the executives should care.

42:22 – Career as a Profit and Loss Statement

• In finance at Intel they have a rotational culture with the overall intent to have well rounded finance people.
• Rather than have people with 15-20 years of deep expertise in one specific area, they wanted people who could move around and over time be more and more well rounded.
  • Part of this may also be objectivity.
  • There is a tension of finance in both supporting an organization and being able to step in at times and disagree (i.e. the value of objectivity). If you’re in one place too long it is hard to maintain that objectivity over time.
• Scott has had experience as a cost analyst and a product line analyst (a couple of different roles with very different scopes). Scott was a front line manager of a view different groups with one being more investment oriented and the other being more focused on revenue and pricing.
• Thinking through a profit and loss statement…
  • The top line is usually revenue
  • Below that is a product cost
  • Subtracting the cost from the revenue to get profit (or margin)
  • There are also investment costs like sales, marketing, and research and development
  • Eventually you get down to the bottom line (operating profit)
• As Scott thinks about the different roles he has had, he thinks about the different focus within the profit and loss statement. Some were pricing, some were product cost, and some were on the investment side.
  • "Once you have that well rounded breadth, you would be able to understand the full P&L." – Scott Egbert, reflecting on his career as a focus on different areas of a profit and loss statement
  • John says he had not thought about thinking of where your role fit into a company and whether you’re getting a full view of the company based on how many lines on a profit and loss statement you’ve had a role in doing / focusing on.
  • Maybe the technologist can go through a similar exercise to think about how they have supported a product line (its infrastructure, its sales and marketing, its research and development). John says he needs to go and do that for steps in his career.
  • Nick says using the profit and loss statement as a guide book for the experience you might be lacking or wanting is a really interesting idea.
  • Scott says a CFO is getting asked all kinds of questions by investors. The investors can ask about any part of the profit and loss statement, the cash flow statement, or the balance sheet.
    • "The CFO has to be well versed on any kind of question they could get." – Scott Egbert
  • A business unit CFO has investors in the form of the CEO and the board of directors.

47:01 – Understanding and Communicating with Finance

• What can technologists or members of other departments in the company do better to communicate with finance?

  • Sales engineers sometimes have to provide numbers (maybe for sizing something) that get rolled up into a finance function somewhere.
  • In IT operations you’re getting asked for operational costs of parts of the infrastructure and sometimes doing comparisons of renting vs. buying. People don’t necessarily understand why what they are being asked to provide is important or how it is being used. How can we better interact with the people making these requests to understand what is being asked, what decisions are being made with this information, and how we can be better about providing the right information?
    • Scott says the communication is both ways. Finance can also do better in sharing what they are asking for and why because context always matters.
    • When finance is asking something, there can be an implied motive. Is finance looking to cut your numbers? Maybe it makes you feel like you should sandbag a little.
    • Mutual transparency will almost always lead to the better outcome.
  • It’s a legitimate question for someone to wonder why a team needs to buy more hardware or why cloud usage costs went up.
    • Sometimes the quantification is tricky. If we could easily map an investment to the amount of profit the company would receive in return it would be easier to rank investments by the largest return to the company.
    • These situations become challenging when the return on investment is more subjective. Take a security issue for example. In that case you would have to look at the risk of not doing something to resolve the security issue and its impact to the company.
    • Two-way conversations are important because you might be talking about something different than what is being asked or the motivations behind what is being asked.
    • John says is difficult to convey why you’re asking for a specific number. It’s easier to just get the number so you can plug it into a spreadsheet and run calculations.
    • "If I’m a finance analyst coming to you and you can’t articulate what the value is…I may be leading us toward a suboptimal decision because I don’t understand the context…." – Scott Egbert
    • Scott emphasizes that finance personnel should have strong business acumen.
  • Nick thinks some financial acumen is important for people who need to work with finance teams.
    • Scott was asked after having been at Intel for about 10 years to train a team of technologists on profit and loss statements, balance sheets, etc. and how these pertained to the business. This group of technologists wanted to understand how what they did affected Intel’s bottom line.
    • It surprised Scott that people so senior at the company had what he would consider basic questions about finance. It made Scott think he should be more proactive in going and sharing this with other groups within the company.
    • "My assumption that they understood it was not a good assumption." – Scott Egbert on assuming other teams within the company understood profit and loss statements, balance sheets, cash flow statements, and other elements of finance

• Scott may have needed to present to executive team members but also to audiences who might be more technical across multiple groups within the company. How do you develop the communication and presentation skills to be effective across the different audiences and areas?

  • Scott refers to this as being slightly bilingual.
  • With the technologist audience, Scott would need to be able to get into the details. Executive audiences likely do not want to see a data table, but this may be exactly what a technologist audience might want to see.
  • It would be important to explain the numbers and where they came from to technical audiences.
  • Executives will want to know the big picture story, why what they are being presented matters, if someone needs action from them, and the overall decision you’re trying to drive.
  • Executives are very busy and don’t want to be bothered with too many details.
  • Scott emphasizes a need to be fluent in both of these languages (the detailed view for a technical audience and the summarized edition for executives).
  • John mentions you would need to also be able to pivot or tailor your presentation to anyone who might be an outlier or at a different place on the spectrum between these two (technical audience or executive audience).

• Mentioned in the outro

  • The discussion of catering presentations differently for a technical compared to an executive audience reminded both Nick and John of the past discussions with Neil Thompson, founder of Teach the Geek. Also check out:
    • The Teach the Geek Podcast
    • Episode 193 – Communication for Specialists with Neil Thompson (1/2)
    • Episode 194 – Question Askers and Problem Solvers with Neil Thompson (2/2)
  • Nick did not think about organizational development being such a huge cap for people in leadership to go back and fill through a business school. John mentions it makes sense to him in retrospect but that it wasn’t obvious at first.
    • For those going into leadership, don’t overlook this facet (organizational development and leadership).
    • Maybe we should look at job descriptions for directors and senior directors for this requirement? John says he has seen organizational development listed on resumes.
    • This jogs Nick’s memory of the discussions with Shailvi Wakhlu in Episode 210 and Episode 211. Shailvi created job leveling standards at one company for a large organization underneath her care (more discussion on that in Episode 211).
    • John has come across people with major tasks of having job leveling standards as part of organizational development.
    • Maybe we need to find a guest who can comment on organizational development metrics and experience to list on a resume!
  • John really liked the concept of targeting business unit leadership as an option people don’t always consider.
  • We barely glazed the surface on conversations with finance and what miscommunications really entail. It’s on us to have more conversations about it on the show!

Contact us if you need help on the journey, and be sure to check out the Nerd Journey Podcast Knowledge Graph.